Investors' Soapbox AM

Excess Cotton Supply Has Retailers Panting

American Eagle, Aeropostale and Gap could all recapture margins.

September 17, 2012

At this point in the year, world-wide cotton yields for the Northern Hemisphere are in and suggest a world-wide excess supply of cotton at the end of 2012 and into 2013.

The most recent U.S. Department of Agriculture cotton report has revised beginning-of-month world-wide cotton stocks up over 1.7 million bales (mostly coming from an upward revision in China of 1.3 million bales). There has also been an upward revision in Indian cotton production of approximately one million bales, offsetting disappointing yields in Brazil...